Could the best gift this Christmas be waiting at the gas pump? For the millions of U.S. motorists, at any rate, the answer would appear to be yes. GasBuddy is projecting the national average price for regular unleaded to settle around $2.79 per gallon on December 25-the cheapest Christmas Day fuel since 2020, when prices averaged $2.26. That represents a major drop versus last year’s $2.95, and welcome news for holiday travelers, with drivers collectively saving over half a billion dollars during the Christmas week versus 2024.
Patrick De Haan, head of petroleum analysis at GasBuddy, said: “Christmas is often when gas prices settle near the lowest levels of the year, and 2025 is no exception. Refinery maintenance has wrapped up, supplies are rising, and winter demand is much lower than in summer all of which help keep a lid on prices.” He forecasts that the trend of lower costs may flow over into 2026, all other things being equal.
It has slipped steadily since the beginning of December and last week fell below $3 per gallon for the first time in more than four years. Current averages sit at $2.905 per gallon, down from $3.030 a year ago. The savings, however, are hardly uniform. Major regional disparities remain: Oklahoma drivers are paying just $2.339 per gallon while Californians pay $4.343. In pockets of Missouri, Colorado, Oklahoma and Texas, stations already sell regular unleaded for less than $2 per gallon, an almost unimaginable sight in recent years. Cross state lines, and that may mean a 20- to 80-cent differential per gallon, making strategic fuel stops one of the easiest ways to stretch travel budgets.
All these declines are rooted in the global background of crude oil. Brent crude for February delivery last traded at $59.88 a barrel, compared with $62.44 a week earlier, while WTI crude for January delivery declined to $56.12 from $58.74. The U.S. benchmark hit $55 a barrel on December 16, its lowest since February 2021. The chief reason lies in the huge oversupply: that OPEC has been increasing its production since April to recover market share, while U.S. output climbs to record highs of more than 13.8 million b/d. A combination of this supply surge, weaker-than-expected demand growth and an easing of geopolitical risk premiums, has sent prices tumbling across the board.
Seasonal factors are amplifying the effect. Winter-grade gasoline is cheaper to produce than summer-grade since fewer additives are required to prevent evaporation in hot weather. Refiners have finished their seasonal maintenance, pushing output up just as winter demand naturally tends to fall. Accordingly, fuel costs tend to reach annual lows during the holiday season-a pattern reinforced by historical data showing December often delivers the most affordable pump prices of the year.
That timing coincides with a spike in travel. A estimates a record 122.4 million Americans will travel at least 50 miles between Dec. 20 and New Year’s, with 109.5 million taking to the road. Even with all those extra cars on the road, the typical seasonal decline in demand and ample supply are preventing prices from increasing. Matt McClain, GasBuddy petroleum analyst said, “We are looking at prices not seen since about March 2021, almost five years ago. That’s certainly great news for motorists. That’s delivering a weekly savings of nearly $400 million compared to just this time last year when prices were 12.3 cents higher per gallon.”
Diesel prices have also retreated-to an average of $3.642 per gallon nationally, compared with $3.765 a month ago. This across-the-board decline in fuel prices is contributing to easing inflationary pressures, offering relief not only to individual drivers but also to freight and logistics operators whose costs are so closely tied to diesel.
Moving forward, analysts indicate prices could be even lower, provided peace negotiations between Russia and Ukraine heat up and any sanctions on Russian oil are lifted, thus pouring more supplies into the already saturated world markets. Combined with winter refining advantages, forecasts of oversupply continue into 2026.
